Subscribe to glassBYTEs!

N.Y. Attorney General Investigates Short Pays

The New York Attorney General office's currently is investigating complaints filed by insureds in the state who were contacted to pay the remainder of what was owed for auto glass work that resulted in short payment by insurance companies, according to Mike Russo, controller for Thru-Way Glass in Syracuse, N.Y. Russo and Scott Owens of Excel Auto Glass in Lake Katrine, N.Y., met with assistant attorney general James Morrissey in Buffalo, N.Y., last Tuesday, about this issue, which originated from another glass shop in the state.

"I argued that the policyholder has the ultimate responsibility in paying the short pay," Russo says. "We discussed differences in health insurance versus auto insurance policies. I argued that an auto insurance policy is different from a health insurance policy in that it is an indemnification policy and has no disclosures as to pricing caps, etc."

In addition, they discussed networks Morrissey.

"I told him that in the case of a health insurance policy, a policyholder knows going in that there may be out-of-pocket expenses when [he] use[s] an out-of-network provider," Russo adds. "I argued that if a policyholder purchases a sub-par policy and his insurance company does not fully indemnify [him], then [he is] responsible to the service provider."

In related news, in December the Minnesota Commissioner of Commerce issued a Consent Order against AIG Personal Lines Claims for short pays (CLICK HERE for related story). The order noted that AIG and others "paid an alleged 'prevailing rate' to Minnesota body shops that was less than the total charged by the body shops for certain repair costs." The Consent Order imposed a civil penalty of $20,000 and a cease and desist order from any continued violations of Minn. Stat. 72A.201, subd. 6(2)(a) (2006), the statute the order cited AIG violated. In addition, Minnesota Commissioner Glenn Wilson also ordered AIG to reimburse all the insured and claimants referenced in the order for their out-of-pocket expenses paid to the body shops.

Need more info and analysis about the issues?
CLICK HERE to subscribe to AGRR magazine.